Autotrader's IPO Has a Few Dents
Investors should realize Autotrader is facing heavy competition from Cars.com and Edmunds.com as well as search engines like Yahoo! (YHOO) and Google (GOOG).
Autotrader seems to recognize that having a site that sells car isn't unique or sticky. So, they are heavily invested in their software solutions for car dealers, an arena where competition isn't quite as stiff.
Auto makers and dealers realize that car shopping is increasingly moving online and the advertising dollars are following the shoppers. Borrell Associates predicts that online media buys for the auto industry will rise 39% in 2012. Auto ad dollars will be shifting away from direct mail, magazines and radio. CarMax (KMX) has learned this and has a strong web presence. Franchised auto dealers have also increased their online presence.
Cars.com is taking market share and now web behemoth Google is getting into the lead generation business. If Google thinks you are looking for a car, like a Toyota, then it will give you a car and dealer to look at. For now it is only being tested in certain markets in California. CarWoo! is rumored to be hooking up with Yahoo! Autos. Maybe because they both like exclamation marks? These deals demonstrate the battle for online auto shoppers is heating up.
Autotrader wants to raise $300 million and this is its second attempt to go public. The timetable for the listing is still unclear and the company filed once before in 2000, only to withdraw. The company plans to list on Nasdaq under the symbol "ATG." The fact that the company is already profitable and has a stable revenue base is a big plus, but investors need to consider the tight competition and hefty debt load before ponying up for Autotrader. --Written by Debra Borchardt in New York.>To contact the writer of this article, click here: Debra Borchardt. Follow @WallandBroad
Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
